Angel One Ltd Stock Outlook
The current market price of the share is Rs 1283 each. The stock’s 52-week high is Rs 2022 each and the 52-week low is Rs 839 each. The stock has given multibagger returns of 365% over the past 5 years. According to Motilal Oswal, if you invest in the stock at the current market price, it can offer you a potential return of 36%.
Beat on interest income; F&O share continues to rise
Angelone’s operating revenue was subdued growing 3% QoQ and 62% YoY to INR 4.2 billion (4% ahead of our estimate), driven by revenue healthy interests. Brokerage gross activity declined slightly on a sequential basis, driven by a 23% drop QoQ in cash brokerage revenue to INR 659 million. This was partially offset by 3% QoQ growth in the F&O segment at INR3.8b. The share of the F&O segment in gross brokerage revenue increased further to 81% in 1QFY23 from 78% in 4QFY22. On a quarterly basis, the average revenue per customer fell to INR 453 at 1QFY23 from INR 513 at 4QFY22. Other income decreased by 8% QoQ but increased by 18% YoY to INR 0.9 billion (online).
Muted revenue performance
Total operating expenses increased by 16% QoQ and 53% YoY to INR 2.7 billion (online). Weak revenue performance and an increase in expenses drove the P/I ratio up to 51.6% from 45.1% year-over-year in 4QFY22. Payroll costs jumped 71% YoY and 36% QoQ to INR1b (8% ahead of our estimate). The large increase can be attributed to: 1) the hiring of 20 people to the digital team at 1QFY23, bringing its digital talent pool to 630; 2) ESOP expenses; and 3) annual increase and variable compensation. Employee cost, as a percentage of operating revenue, climbed 20% from 15% in 4QFY22.
Evaluation
According to Motilal Oswal, “Angelone plays perfectly on: 1) the financialization of savings and 2) digitalization. It has demonstrated a decent performance in 1QFY23, even in difficult market conditions. invest in technology and strengthen its position. Given the macroeconomic environment, most discounts ensure healthy profitability. The same can be increased as the environment is relatively favorable. Our earnings estimate for FY23 remains unchanged as a lower volume assumption is offset by higher interest income However, we are reducing our earnings estimate for ANGELONE by 4.8% in FY24 as we are moderating our order volume growth assumptions. We maintain our buy rating on the stock with a revised TP of INR 1,750 (based on 18x FY24e EPS).”
About Angel One Ltd
Angel One Limited (formerly known as Angel Broking Limited) is a member of the Bombay Stock Exchange (BSE), National Stock Exchange (NSE), Metropolitan Stock Exchange of India (MSEI), NCDEX and MCX. Angel One Limited is also registered as a depository participant with CDSL. It is a technology-driven financial services company that provides brokerage and advisory services, margin financing, equity-based loans (through one of its subsidiaries, AFPL ) and the distribution of financial products to our customers under the “Angel One” brand. It has a market capitalization of Rs 10,688 crore.
Disclaimer
The security was selected in the brokerage report of Motilal Oswal Financial Services. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before making any investment decision.
